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2016 (11) TMI 216 - PUNJAB AND HARYANA HIGH COURT

2016 (11) TMI 216 - PUNJAB AND HARYANA HIGH COURT - TMI - Classification of goods - tissue papers - Whether the tissue paper would be covered by Entry 57 Schedule 'C' of the Haryana Value Added Tax Act, 2003, which is assessable at the rate of 4% or it is assessable under the Residue Entry at the rate of 12.5%? - user test need to be applied or not? - Held that: - If the case of the appellant is considered in the light of enunciation of law, as referred to above, Entry 57 in Schedule 'C' only pr .....

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s no competing entry to find out whether product falls in entry 'A' or 'B'. The residuary entry is to be invoked in case, with liberal construction to the specific entry, the product could not be found to be forming part thereof - appeal allowed - decided against Revenue. - VATAP No. 73 of 2011 (O&M) - Dated:- 27-10-2016 - MR. RAJESH BINDAL AND MR. HARINDER SINGH SIDHU, JJ. For The Appellant : Mr. Amar Pratap Singh, Advocate For The Respondent : Ms. Mamta Singla Talwar, Deputy Advocate General, .....

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e rate of 12.5% ? Arguments of the appellant 2. Learned counsel for the appellant submitted that the appellant is engaged in the business of manufacture and sale of tissue paper, napkin, toilet paper rolls, kitchen wipes and facial tissues. All along, the goods being manufactured by the appellant were being considered to be part falling in Entry 57 of Schedule 'C' of the Haryana Value Added Tax Act, 2003 (for short, 'the Act') leviable to tax @ 4%. The appellant filed application .....

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ld be taxable @ 12.5%, being unclassified goods. The order was challenged before the Tribunal. The Tribunal, vide order dated 29.7.2011, dismissed the appeal. The order is under challenge before this court. 3. Learned counsel for the appellant submitted that firstly the Financial Commissioner and Principal Secretary to Government of Haryana, Excise & Taxation Department had gone wrong in observing that the end use of the product is to be seen for the purpose of its classification. On his own .....

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aka High Court in Super Market v. State of Karnataka, (1997) 104 STC 15 is totally misplaced for the reason that entries in Karnataka Sales Tax Act, 1957 are totally different. One of the Members of the Tribunal had given different reasoning for reaching to the same conclusion, but even that cannot be sustained in judicial scrutiny. The Entry is quite wide. It does not specify any particular use of the product mentioned therein, namely, 'paper'. 'Paper' has multiple uses and with .....

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s in that case is on the State. Common parlance test is to be applied with reference to the persons, who are dealing in the product. As per the market survey conducted by the appellant, which was placed before the authorities, the goods manufactured by the appellant are treated as 'paper'. To limit the product 'paper', as mentioned in the Entry, only to the extent of use for writing or printing, drawing, packing or decorating or wall paper is not legally sustainable, as Entry 57 .....

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be falling in the Entry providing for milk whole of separated or reconstituted. It was given purposive interpretation. Judgment of Hon'ble the Supreme Court in Standard Pencils (P) Ltd. v. Collr. of C. Ex., Madras, 2002 (145) ELT 278 (SC) was relied upon where pencil form of 'Kum Kum' was held to be falling in the Entry mentioning 'Kum Kum'. It was not held to be limited to 'Kum Kum' in powder, liquid or sticker form. Reference was also made to judgment of Hon'ble .....

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er submitted that if the goods can be covered in the Entry specifically providing for a product by giving liberal construction, the residuary Entry providing for higher rate of tax should not be resorted to. In that event, heavy onus is on the revenue. In support, reliance was placed upon Commissioner of C. Ex., Meerut v. Maharshi Ayurveda Corpn. Ltd., 2006 (193) ELT 10 (SC). Arguments of the State 6. In response, learned counsel for the State submitted that a plain reading of the Entry would gi .....

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#39;ble the Supreme Court opined that 'paper' is understood to mean a substance which is used for bearing writing, or printing, or for packing, or for drawing on, or for decorating, or covering the walls. The product being manufactured by the appellant does not fall in any of the aforesaid categories, hence, will not be covered under the Entry. In State of Orissa v. Gestetner Duplicators (P) Ltd., (1974) 33 STC 333 (Orissa), stencil paper was not held to be 'paper'. In Commission .....

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erence to paper or its products, reference was further made to judgments of Karnataka High Court in STA No. 36 of 2010- 3M India Limited v. State of Karnataka, decided on 30.8.2012 and STRP Nos. 389- 435 of 2012- M/s Raman Boards Ltd. v. The State of Karnataka, decided on 20.8.2014. She further submitted that the judgments sought to be relied upon by the appellant are distinguishable on facts. While mentioning the goods in different Schedule, their use is always considered. It is on that basis o .....

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a dramatic change, otherwise the issue therein was whether carbon paper was 'paper' or not. The words used by Hon'ble the Supreme Court in the judgment are not to be read as a statute, once the uses to which 'paper' can be put to have not been mentioned in the Entry. In M/s Raman Boards Ltd.'s case (supra), the goods under consideration before the court were 'paper products' and not 'paper' as such, hence distinguishable. 8. Heard learned counsel for the p .....

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apers and its forms, namely, tissue paper, napkin, toilet paper rolls, kitchen wipes and facial tissues fall under Entry 57 of Schedule C of the Act ? 10. The relevant Entry under consideration in the present appeal are extracted below: SCHEDULE C [See sub-clause (iii) of clause (a) of sub-section (1) of section 7] Sr. No. Description of goods xx xx xx 57. Paper, paper board and newsprint 11. A clarification was sought by the appellant by filing application under Section 56(3) of the Act to the .....

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e Financial Commissioner and Principal Secretary to the Government of Haryana was upheld in appeal filed by the appellant before the Tribunal vide order dated 29.7.2011. Four out of five Members of the Tribunal, while relying upon the judgment of Karnataka High Court in Super Market's case (supra), where the product, classification of which was the issue, was regarding paper napkin. It was found to be not forming part of the Entry containing 'paper', but was found to be forming part .....

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fferent uses by different persons. That cannot entitle the revenue to apply different rules of tax to the sales of the very same product by different dealers depending on the use to which they will be put by the purchasers. The particular use to which an article can be applied in the hands of a special consumer is not determinative of the nature of the goods. 13. In Commnr. of Central Excise, Cochin v. M/s Mannampalakkal Rubber Latex Works, 2007 (217) ELT 161, Hon'ble the Supreme Court opini .....

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U. P. v. M/s A. R.Thermosets (Pvt.) Ltd., decided on 6.9.2016. 15. In M/s Kores (India) Ltd.'s case (supra), the assessment year involved in the judgment was 1956-57. It was a case under U. P. Sales Tax Act, 1948. The issue under consideration before Hon'ble the Supreme Court was whether carbon paper is paper falling within the purview of 'paper'......? In considering the aforesaid issue, Hon'ble the Supreme Court referred to various dictionaries for meaning of word 'pap .....

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and then passing it through chilled rolls. It can be used only between two sheets of paper in order to reproduce on the lower sheet that what is written or typed on the upper sheet, i.e., making carbon copy. Referring to the judgments of different High Courts dealing with 'ammonia paper and ferro paper' [Kilburn & Co. Ltd. v. Commissioner of Sales Tax, U. P., Lucknow, (1973) 31 STC 625] and 'stencil paper' [Gestetner Duplicators (P) Ltd.'s case (supra)], it was opined th .....

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provisions of a statute, it may become necessary to embark into lengthy discussions, which is meant to explain and not to define. Judges interpret words of statutes; their words are not to be interpreted as statues. Reference can be made to judgments of Hon'ble the Supreme Court in Bharat Petroleum Corporation Ltd. v. N. R. Vairamani, (2004) 8 SCC 579 and Inbasegaran and another v. S. Natarajan (Dead) thr. Lrs., 2014(4) RCR (Civil) 872. 17. The judgment of Karnataka High Court in Super Mark .....

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rbon paper, blotting paper, water proof paper, PVC coated paper, ferro paper, ammonia paper, stencil paper but excluding paper falling under serial number 55, pulp boards, art boards, duplex boards, triple boards, card boards, corrugated boards, and the like, cellophane. 18. 'Paper napkin' was found to be covered under Entry at Sr. No. 55 containing toilet articles. Reference was made to judgment of Hon'ble the Supreme Court in M/s Kores (India) Ltd.'s case (supra). It was a case .....

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Section 5 4.00% 94(ii) Newsprint, cardboard, paper products, note books and printed materials including greeting cards Do 5.00% 20. Referring to the judgment of Hon'ble the Supreme Court in Mukesh Kumar Aggarwal Co.'s case (supra) that 'user test', though may be logical but inconclusive, it was opined that when a generic name is used in the Entry without any further clarification regarding inclusion or exclusion in the expression 'paper', it shall include all kinds of pa .....

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attached to the Schedule to the Act, is to use the expression immediately after using generic name of the commodity, 'paper of all kinds', but, whenever they included or excluded certain types of paper, it was made clear by appropriate provision. In the absence of any inclusion or exclusion in the expression paper , it can be said that it included all kinds of paper. Sub-entry (ii) in item No. 94 of the First Schedule to the KGST Act, speaks of newsprint, cardboard, paper products, note .....

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(Pvt.) Ltd.'s case (supra), the issue under consideration was the rate of tax on bitumen emulsion. Bitumen is in solid form, whereas bitumen emulsion is in liquid form. Bitumen emulsion is a processed bitumen. It comes into existence when bitumen is treated with emulsifiers and other chemicals to attain a liquid form. The stand taken by the revenue was that the word bitumen should be given narrow meaning for the reason that the Legislature has not thought it appropriate to use the prefix or .....

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